What factory and fast-food workers have in common

By Kate Gibson

May 17, 2016 / 5:30 AM
/ MoneyWatch

While the reliance of fast-food workers on food stamps and other public assistance has been a much-publicized aspect of the Fight for 15 and other efforts to raise the minimum wage, the number of manufacturing jobs that also pay poverty-level wages has largely flown under the radar.

Yet more than a third of nonsupervisory manufacturing production workers count on at least one government program to support themselves or their families. That statistic rises to half when looking at those hired through temporary staffing agencies, according to the University of California, Berkeley's Center for Labor Research and Education.

"Manufacturing has long been thought of as providing high-paying, middle-class work, but the reality is the production jobs are increasingly coming to resemble fast-food or Walmart jobs, especially for those workers employed through temporary staffing agencies," noted Ken Jacobs, chair of the Labor Center and co-author of a recently released report on the topic.

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And while employment in manufacturing has started to grow again after the recession, "the new jobs created are less likely to be union and more likely to pay low wages," said Jacobs.

Between 2009 and 2013, the Labor Center calculates that low wages in manufacturing cost taxpayers approximately $10.2 billion a year on public safety-net programs for manufacturing workers and their families.

Eight of the 10 states with the highest participation rates in public programs that support factory workers' families are in the South; the other two are New York and California.

The reality flies in the face of just how Americans perceive manufacturing, a sector that in days gone by offered stable, well-paying employment and benefits to those without college degrees.

Americans overwhelming view manufacturing as important to the nation's economic prosperity. If given the chance to create 1,000 jobs in their community, manufacturers tops the list, according to a poll by Deloitte and the Manufacturing Institute.

The sentiment is reflected by those looking for votes, including President Obama and his would-be successors.

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In running for reelection in 2012, Obama vowed to create 1 million new manufacturing jobs by the end of 2016. In campaigning in Indianapolis in April, Donald Trump drew applause while railing against Carrier's decision to move 1,400 jobs from Indianapolis to Mexico. Democrats Hillary Clinton and Bernie Sanders have also stressed the importance of manufacturing jobs.

The national longing for a strong manufacturing sector is seemingly based on what the jobs offered in decades past, when production workers employed in manufacturing earned wages significantly higher than the U.S. average. By 2013, however, the typical production worker made 7.7 percent below the median wage for all occupations, according to the National Employment Law Project (NELP).

More than 600,000 manufacturing workers earn $9.60 an hour or less, and more than 1.5 million, or one out of every four, earn $11.91 or less, NELP found.

The median wage for a manufacturing production worker was $16.14 an hour in 2015, below the $17.40 an hour for all workers, according to separate numbers from the Bureau of Labor Statistics. And while manufacturing jobs continue to pay more than most jobs available to those without a bachelor's degree, the average earnings are pumped up by the wages of long-time workers because recently created jobs offer less.

The pay situation is particularly bleak in automotive, the largest segment of manufacturing, where real wages for auto parts workers has fallen nearly 14 percent from 2003 to 2013, three times faster than manufacturing as a whole and nine times faster than the decline for all occupations.

Since 1989, hiring of assembly line workers through temporary staffing agencies has spiked. About 14 percent of auto parts workers are employed by staffing agencies and make, on average, 29 percent less than those employed directly by manufacturers, according to NELP.

The average hourly wage for assemblers and fabricators hired through a staffing agency in 2014 was $10.88, versus $15.03 for those hired directly.

The auto industry has added nearly 350,000 jobs and invested $38 billion in U.S. plants since 2009, but the jobs created are worse than those lost. New hires at auto parts plants in Michigan, Indiana, Ohio, South Carolina and Tennessee earn about a quarter less than other auto parts workers in those states, NELP found.

Workers at the Carrier plant Trump excoriated make more than $20 an hour and are part of a union. Overall wages are typically higher in states with higher rates of workers represented by collective bargaining agreements, while the counterargument is that unemployment is lower in right-to-work states.